How can marketers use sales invoices to estimate consumer surplus in relation to willingness to pay?

• A. Sales invoices directly reveal the exact willingness to pay for each customer.
• B. Marketers use sales invoices only to calculate production costs, not consumer surplus.
• C. By comparing the prices customers actually paid to their maximum willingness to pay, marketers can estimate consumer surplus.
• D. Consumer surplus is always equal to the total sales revenue shown on invoices.

Answer: (C)

Verified step by step guidance

1. Understand that consumer surplus is the difference between what consumers are willing to pay for a good or service and what they actually pay.
2. Recognize that sales invoices provide data on the actual prices paid by customers, but do not directly show their maximum willingness to pay.
3. To estimate consumer surplus, marketers need to gather or infer customers' maximum willingness to pay through surveys, market experiments, or historical data.
4. Compare the maximum willingness to pay for each customer with the price they actually paid as recorded on the sales invoices.
5. Calculate consumer surplus for each transaction as: \(\text{Consumer Surplus} = \text{Willingness to Pay} - \text{Price Paid}\), and aggregate these values to estimate total consumer surplus.